Crackdown on mining tax loophole

A tax loophole that allows Australia’s richest miners to claim tax breaks for exploration costs could be closed.

Assistant treasurer David Bradbury will announce the largest miners will no longer have the right to claim an upfront deduction that allows them to claim the cost of exploration of smaller mines.

It is understood some of the large miners had been misusing this tax loophole, The Daily Telegraph reported.

Some of the individual deductions claimed are understood to have been more than $1 billion, with total claims over the past three years adding up to $11 billion.

The government will reveal a rule change that will compel big miners to claim the costs as depreciation instead of an instant deduction, eliminating the rort.

But smaller miners can still claim the exploration deduction upfront.

Some large mining companies have been taking advantage of the loophole by claiming deductions for more than just the exploration, including the steep cost of mining rights.  

This is effectively the value of the resources.

The tax crackdown targets billions of dollars discovered through the loophole and could generate hundreds of millions of dollars for the government, which has been widely criticised for raising less than half of what it forecast from the mining tax.

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